Noble gases and the shock of war: Laser and semiconductor manufacturers adjust to price increases while securing supply chains

01 May 2023
William Burgess

February 24 marked the one-year anniversary of Russia’s unjustifiable invasion of Ukraine. During this period, the laser and semiconductor industries have endured a number of supply chain disruptions. One often overlooked commodity used in these industries is the high-purity gases needed to manufacture gas lasers and to operate semiconductor manufacturing equipment. Gases such as neon (Ne), krypton (Kr), argon (Ar), and xenon (Xe) are widely used in both applications, and gas supply disruptions have had a significant impact on cost and supply chain complexity.

Before the invasion, Ukraine accounted for 50 to 70 percent of global neon gas production and 40 and 30 percent, respectively, of global krypton and xenon gas production. Companies like Cryoin, Ingas, and Iceblick had major operations in Mariupol, Odessa, and elsewhere in Ukraine. Before the war, Ingas was producing 15,000 to 20,000 cubic meters of neon gas per month. Cryoin Business Development Director Larissa Bondarenko has said that the company produced about 10,000 to 15,000 cubic meters of neon gas per month in Odessa.

Production of these gases in Ukraine halted suddenly at the start of the war. Russia is also a major producer of high-quality gases. Disruption to the gas supply worsened in mid-2022 when the Russian Ministry of Industry and Trade announced that it would restrict exports of these high-quality gases.

Both Intel and Applied Materials have said that the supply of these specialty gases would be constrained well into 2023. Demand is expected to increase by 30 percent over just the next four years.

The market for rare gases is not transparent and prices are not published. Specialty gas suppliers mainly engage in confidential, long-term contracts. It has been reported that neon prices in China and krypton prices in Japan quadrupled in the first two months of 2022. Since Russia started the invasion, neon prices in China increased tenfold in March 2022, while xenon and krypton prices rose by about 50 percent. In Japan, the price of krypton has risen from as little as $1.72 per liter to $8.60 per liter by the end of January.

These noble gas price increases are similar to those experienced after Russia annexed Crimea in 2014. Following that invasion, neon prices increased by 60 percent. Manufacturers responded by diversifying their supplies. In 2016, one of the largest industrial gas suppliers, Linde, invested US $250 million in a neon production facility in La Porte, Texas. It was designed to produce annually 40 million liters of neon. This year, in Brazil, Karoon Energy doubled down by drilling a second well after it discovered a neon-rich area 210 km off its coast.

Gas lasers based on noble gases have been around for more than 50 years. One could easily assume these types of lasers have been replaced with newer laser-diode technologies. This is largely correct except for a few critical applications. Argon-ion and helium-neon gas lasers are still widely used in the semiconductor field. Helium-neon lasers are often used as a wavelength reference for equipment calibration (i.e., spectrometers) or for particle detection systems used in pharmaceutical manufacturing.

High-purity gases are also used for excimer lasers that provide the deep ultraviolet light source for semiconductor lithography. Excimer lasers use a gas mixture that combines argon, krypton, xenon, neon, and halogen to produce light at 193 nm. Neon makes up approximately 96 to 97.5 percent of the mixture and, as a carrier gas, is essential to the laser’s operation. These gases are regularly changed out during use, which further drives the demand for a solid supply chain.

The overall supply of high-purity gases is dominated by France’s Air Liquide, Japan’s Dayo Nippon Acid, and in the US, Linde and American Air Chemical. Together, they account for 80 percent of the total market supply for specialty gases. Each has made significant changes to improve the supply situation and to alleviate pricing concerns.

To secure their supply chain, semiconductor companies have made adjustments, too. One example is TSMC (Taiwan Semiconductor Manufacturing Company), which announced plans to bring some of its neon production to Taiwan. Excimer laser manufacturers have reduced neon consumption by 25 to 70 percent by adjusting software and optimizing processes. They have improved gas collection during the laser recharging procedure as well as improved processes for removing impurities from the gases, ultimately injecting them back into the laser.

Although it’s been more than a year, the war in Ukraine is still impacting both laser and semiconductor manufacturing in unexpected ways. The market for specialty gases will eventually rebalance and prices, hopefully, will return to normal. Until then, manufacturers will be spending more time and money to secure their supply chain.

William Burgess is Co-CEO of Power Technology, Inc. The company was founded in 1969 to manufacture power supplies for helium-neon gas lasers and is currently one of the top manufacturers supplying customers worldwide. Learn more at


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